Holacracy: How Applying Coding Models to Management Problems Creates a Mess when Proven Knowledge from Management Science is Ignored

Complex Dialogues - Vilma Machado 2016

Complex Dialogue, 2016, by Vilma Machado (c)

The article shows a sharp eye for the flaws of Holacracy, or rather of the way Holacracy as a model for designing and running businesses has been implemented. The way Holacracy is known to generate problems when applied with a wider scope than the mere team scope. Implementing management and organisational principles like holacratic principles and having to abandon those within a couple of months of years after deep conflicts were created and the effectiveness of the business was put in jeopardy is treating your staff, your stakeholders and funders as guinea pigs.

Markus Fischer puts a finger on the sore spot: rationally dividing tasks into roles, and defining other non-task-related aspects of people out of sight has been known to generate conflicts, communication issues and loss of control. Could it be that coders’ models of how tasks realise functions and functions realise systems work well in the realm of logic or computer code, and not so well in social relationships? Zappos and Medium have abandoned holacratic management (cf. see the quotes of Evan Williams of Medium.com in Forbes.

The implementations of Holacracy that did not work out well have obviously not been based on valid models of effective management and organisation. Obviously, the makers, implementors or users were not aware that Max Weber already showed, more than 100 years ago, that an objective-rational approach to organising and management is only an aspect view, and that it does not provide a full understanding of societies and communities. Also, they could have been aware from the fundamental insights derived by sociotechnical systems design (UK, US, The Netherlands) and participative work design (Sweden). Both these schools of organisation theory were developed from the need to make organisations and business more effective, less wasteful and providing a higher degree of healthy and fulfilling working conditions. And the holacracyionists could have been aware from management cybernetics (Stafford Beer, Fredmund Malik and many more) that organisations should be designed with proper mechanisms for identity management, strategy, internal coordination, information and knowledge flows, and other measures to get complex environments into grips.

The story of Holacracy is a story of an organisational concept that was developed in complete ignorance of fundamental insights and concepts of organisation and management theory. And it is the story of the mess that can be created if developing organisations is based on promising, useful but in themselves insufficient methods inspired by coding and design if not combined with the right disciplinary knowledge from management and organisation science.

NB: This article was also published at Medium.com on March 25th, 2017.

 

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